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Verizon spin-off

The website for Verizon has a formula for "Calculating the Tax Basis for Verizon Communications Inc. Common Stock and Idearc Inc. Common Stock Following the Spin-off." Using the formula I was able to calculate the tax basis cost for both stocks. I have no problem with Idearc, as I just changed the price paid (I originally had the price paid as 0).

However, I am not sure what to do with the new price paid for Verizon. I have had Verizon for about nine years, through a split and a name change. Should I go back to the original purchase screen and change the price paid there to the new calculated price? Or is there someplace else where the new price paid should be entered?

Thank you for your help.

Caryl

Reply to
Caryl
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Verizon should have a return of capital transaction entered on the date of spin off, keeping the cash in the same Q account.

Then Idearc has a buy transaction for all of your new shares using the cash from the return of capital.

If you received fractional shares then enter an Idearc sale for the fraction with money you received.

The only problem Q will have is that a Cap Gain report will show the sale as short term to the spin off date while IRS considers it a long term sale to the purchase of the original Verizon shares.

Eric

Reply to
Eric Bloch

Eric,

Thank you.

Caryl

Eric Bloch wrote:

Reply to
Caryl

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